A note on an input control model of a predictive regression interval

A note on an input control model of a predictive regression interval

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Article ID: iaor1995389
Country: United Kingdom
Volume: 45
Issue: 3
Start Page Number: 354
End Page Number: 357
Publication Date: Mar 1994
Journal: Journal of the Operational Research Society
Authors: ,
Abstract:

A well-known problem of prediction in linear regression models is to find a confidence interval for the random value of the dependent variable when the values of the independent variables are given. Such a situation may arise in economic quality control models when the independent variables are costly inputs and the dependent variable is some measure of quality or production. In such a circumstance, an important control objective may be to find values for the inputs that will maximize the lower limit of the prediction confidence interval for a fixed budget, or alternatively, to minimize the cost of the inputs for a fixed lower limit of the confidence interval. This paper shows that global optima can be found using known algorithms. The special case of simple linear regression is discussed and an illustrative example is provided.

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